S&P 500 Chart Setup Hints Losses Ahead, Bolstering US Dollar Outlook

THE TAKEAWAY – S&P 500 technical positioning hints a top may be taking shape below the 1300 figure, pointing to forthcoming gains in the safe-haven US Dollar.

S&P 500 – Prices appear to be showing the beginnings of a bearish Descending Triangle chart pattern below the 1300 figure, with support marked by the 23.6% Fibonacci extension at 1225.71. A break below this boundary initially exposes the 38.2% Fib at 1184.14, although the Triangle’s implied measured target is roughly at 1158.52. Alternatively, a break above downward-sloping Triangle resistance exposes 1292.90, the October 27 high.

CRUDE OIL – Prices are approaching 61.8% Fibonacci retracement resistance at $99.86, with RSI studies checking in at their most overbought since April to suggest that a reversal may be brewing ahead. Confirmation requires a break below $95.25, the intersection of the 50% Fib and the bottom of a rising channel that has guided the way higher since early October. Alternatively, a break above immediate resistance exposes the channel top, now at $103.94.

GOLD – Prices completed a bearish Evening Star candlestick formation near the $1800.00 figure, with confirmation of a larger downside reversal requiring a daily close below 1746.26 at the intersection of the 38.2% Fibonacci retracement and a rising channel bottom. The setup would be invalidated with a close above the $1802.77, the November 8 session high, with a subsequent break above the nearby 61.8% Fib at $1809.62 exposing the channel top now at $1850.82.

US DOLLAR – Prices continue to carve out a bullish inverse Head and Shoulders chart formation, with confirmation on a break through the setup’s neckline roughly defined in the 9789-9870 region pointing to a major near-term bottom now in place. The setup implies a measured target near 10169. The recent range bottom at 9665 marks near-term support, with a daily close below this boundary negating the Head and Shoulders pattern.

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